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EXHIBIT 10.98
CONTRIBUTION AGREEMENT
This Contribution Agreement (this "Agreement") is dated as of the 2nd
day of August, 1999, is among ECT Merchant Investments Corp., a Delaware
corporation ("ECT Merchant"), Enron Capital Management II Limited Partnership,
a Delaware limited partnership ("ECM II"), Enron Capital Management III Limited
Partnership, a Delaware limited partnership ("ECM III"), Joint Energy
Development Investments II Limited Partnership, a Delaware limited partnership
("JEDI II"), East Coast Power Holding Company L.L.C., a Delaware limited
liability company ("ECP Holding"), the California Public Employees' Retirement
System, a unit of the State and Consumer Services Agency of the State of
California ("CalPERS"), and Mesquite Investors, L.L.C., a Delaware limited
liability company ("Mesquite"). ECT Merchant, ECM II, ECM III, JEDI II, ECP
Holding, CalPERS and Mesquite are collectively referred to herein as the
"parties."
WHEREAS, ECT Merchant and CalPERS each owns 50% of the Class B
Membership Interests in East Coast Power L.L.C. ("East Coast Power") (such
parties' Class B Membership Interests being referred to herein as the "ECT
Merchant Interest" and the "CalPERS Interest", respectively); and
WHEREAS, pursuant to a Purchase Agreement dated the date hereof (the
"Purchase Agreement") by and between ECP Holding, El Paso Holding Company and
Mesquite, Mesquite has agreed to purchase 49% of the Class A Membership
Interests and 49% of the Class B Membership Interests in East Coast Power; and
WHEREAS, ECM II, EMC III and CalPERS are the partners of JEDI II
pursuant to the Partnership Agreement of Joint Energy Development Investments
II Limited Partnership, dated as of December 30, 1997 (the "JEDI II
Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties agree as follows:
1. ECT Merchant Contribution to ECM III. Effective immediately prior
to the closing of the transactions contemplated by the Purchase Agreement, ECT
Merchant agrees that it will contribute its entire ECT Merchant Interest, free
and clear of all liens and encumbrances (other than the Senior Note Security
Interests (as defined in the Purchase Agreement)), to ECM III.
2. ECM III Contribution to JEDI II. ECM III hereby agrees, upon
receipt of the ECT Merchant Interest, to contribute the ECT Merchant Interest,
free and clear of all liens and encumbrances (other than the Senior Note
Security Interests), to JEDI II, effective immediately prior to the closing of
the transactions contemplated by the Purchase Agreement.
3. JEDI II Contribution to ECP Holding. JEDI II hereby agrees, upon
receipt of the ECT Merchant Interest, to contribute the ECT Merchant Interest,
free and clear of all liens and encumbrances (other than the Senior Note
Security Interests), to ECP Holding effective immediately prior to the closing
of the transactions contemplated by the Purchase Agreement.
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4. Execution of Amended Limited Liability Company Agreement. CalPERS
hereby agrees, at or prior to the closing of the transactions contemplated by
the Purchase Agreement, to execute the Second Amended and Restated Limited
Liability Company Agreement of East Coast Power, in the form attached hereto as
Exhibit A (the "Amended LLC Agreement").
5. Contribution of CalPERS Membership Interest. CalPERS hereby agrees
to contribute the CalPERS Interest, free and clear of all liens and
encumbrances (other than the Senior Note Security Interests), to JEDI II on the
day after the first anniversary of the closing of the transactions contemplated
by the Purchase Agreement (such date of contribution being the "CalPERS
Contribution Date"). Such contribution shall be subject to CalPERS' receipt of
evidence, in form and substance satisfactory to it, that upon such contribution
it shall have no further obligations pursuant to the Security Agreement
creating the Senior Note Security Interests with respect to the CalPERS
Interest. Such contribution shall also be subject to receipt of the tax opinion
contemplated by Section 3.03(c)(i)(D) of the Amended LLC Agreement; provided,
that if CalPERS cannot make such contribution on the CalPERS Contribution Date
due to the failure of such condition, CalPERS shall make such contribution as
soon thereafter as such condition is satisfied or waived. ECT Merchant,
Mesquite and CalPERS agree that, if such tax opinion cannot be delivered on the
CalPERS Contribution Date, that they will cooperate to agree upon a mutually
satisfactory arrangement that will provide the parties the same economic
benefits as would have been enjoyed if the contribution had occurred.
6. Restriction on Transfer of CalPERS Interest. CalPERS agrees that it
will not sell, convey, transfer, dispose of the CalPERS Interest other than as
contemplated by paragraph 5, without the prior written consent of each of ECP
Holding and Mesquite.
7. Agreement to Share CalPERS Interest Proceeds. On the CalPERS
Contribution Date, CalPERS shall remit to ECT Merchant fifty percent (50%) of
any dividends, distributions, or other amounts received by CalPERS in respect
of the CalPERS Interest from and after the date hereof through the CalPERS
Contribution Date.
8. Agreement Regarding JEDI II Agreement. As among ECM II, ECM III and
CalPERS, such parties agree as follows:
(a) The contributions by ECM III and CalPERS to JEDI II pursuant to
paragraphs 2 and 5 hereof (i) shall not reduce the Commitment (as defined in
the JEDI II Agreement); (ii) shall not, in the case of ECM III, constitute a
Capital Contribution (as defined in the JEDI II Agreement) in cash for purposes
of Section 4.02(b)(i)(B) of the JEDI II Agreement; (iii) shall be deemed
approved for purposes of Section 4.02(b) of the JEDI II Agreement; and (iv)
shall each have the same net agreed value, which ECM II, ECM III and CalPERS
shall specify on or prior to the closing of the transactions contemplated by
the Purchase Agreement; and
(b) each of ECM II, ECM III and CalPERS waives any provision of the
JEDI II Agreement that might require consent to, or might otherwise restrict or
prohibit, the consummation of the transactions contemplated by this
Contribution Agreement.
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9. Termination. This Contribution Agreement shall immediately
terminate and be of no further force or effect in the event that the Purchase
Agreement terminates in accordance with the provisions thereof.
10. Remedies. The parties agree that recovery of monetary damages for
a breach by any of the parties of their obligations under this Agreement may
not provide adequate compensation for the damages caused by such breach, and
accordingly, that any of the parties hereto shall be entitled to seek
injunctive or other equitable relief from any court of competent jurisdiction
to specifically enforce the provisions hereof.
11. Amendment. This Agreement may be amended with the prior written
consent of ECT Merchant, Mesquite and CalPERS.
12. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors.
13. Invalidity. In the event that any one or more of the provisions
contained in this Agreement shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of such Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
15. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the state of Delaware.
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IN WITNESS WHEREOF, the Parties have executed this Contribution
Agreement as of the date first above written.
ECT MERCHANT INVESTMENT CORP.
By:/s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
ENRON CAPITAL MANAGEMENT II LIMITED PARTNERSHIP
By: Enron Capital II Corp., General Partner
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ENRON CAPITAL MANAGEMENT III LIMITED
PARTNERSHIP
By: Enron Capital IV Corp., General Partner
By:/s/ J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
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JOINT ENERGY DEVELOPMENT INVESTMENTS II
LIMITED PARTNERSHIP
By: Enron Capital Management II Limited
Partnership, General Partner
By: Enron Capital II Corp., General Partner
By:
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Name:
Title:
EAST COAST POWER HOLDING COMPANY L.L.C.
By:
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Name:
Title:
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Investment Officer II
MESQUITE INVESTORS, L.L.C.
By: Chaparral Investors, L.L.C.
its sole member
By: El Paso Chaparral Investors, L.L.C.
its sole Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
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